Surf Air Mobility Enters Into Binding Terms For A $35.2M Mandatory Convertible Debenture With GEM Global Yield LLC; Parties Agree To Cancel Previously Issued Shares, Restrict Sales And Redemption Rights, Increase Capacity Under $400M Share Subscri...

Surf Air Mobility Inc. +15.22%

Surf Air Mobility Inc.

SRFM

0.57

+15.22%

Parties Agree to Cancel Previously Issued Shares, Restrict Sales and Redemption Rights, and Increase Capacity Under $400 Million Share Subscription Facility

Surf Air Mobility Inc. (NYSE:SRFM) (the "Company"), the air mobility platform transforming regional flying through electrification, today announced that it entered into a binding term sheet related to the potential issuance of a mandatory convertible debenture to GEM. The proceeds will be comprised of the cancellation of certain shares of the Company's common stock previously issued or issuable to GEM.

The Company, in consultation with its Board of Directors, elected to amend the existing agreements with GEM with objectives of:

  1. Reducing near-term overhang: The term sheet contemplates cancellation of substantially all of GEM's currently issued and freely tradable shares in SRFM.
  2. Imposing a volume restriction: The term sheet contemplates limiting sales of shares related to the debenture to 10% of the Company's prior 30 days' average trading volume per day.
  3. Flexibility to Redeem: The term sheet contemplates giving the company the ability to redeem all or part of the mandatory convertible debenture at 115% of par value at any time, thereby avoiding dilution.

GEM has also agreed to refresh the Company's ability to take both advance drawdowns (up to $100 million) and regular way drawdowns (up to $300 million) back to full capacity, thereby allowing the Company to access up to $400 million as originally contemplated under the Share Subscription Facility with GEM.

The term sheet contains an outline of the terms of the expected transaction, but all terms described in the term sheet are subject to further negotiation between the parties, and the final terms of the transaction will be set forth in the definitive agreements executed by the Company and GEM.

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